UBS fined $11.55m by Hong Kong SFC for compliance issues due to legacy systems

Rick Steves

The Swiss bank has had troubles with financial watchdogs as of late.

Hong Kong’s financial watchdog has fined UBS AG and UBS Securities Asia $9.8 million and $1.75 million respectively over various regulatory breaches.

The Securities and Futures Commission (SFC) has reprimanded and fined the Swiss bank’s entities following a number of issues concerning UBS’s systems and controls between September 2018 and November 2020 by self-reports from UBS or referrals of findings from the Hong Kong Monetary Authority (HKMA).

Between May 2004 and May 2018, UBS failed to make proper disclosure of its financial interests in some Hong Kong-listed companies covered in its research reports, according to the investigation.

The compliance issues were caused by multiple data feed logic errors in a legacy data source used by UBS for tracking its shareholding positions.

In addition, UBS AG failed to:
– obtain valid standing authorities from 91 clients who were not qualified as professional investors and issue contract notes to them between November 2012 and February 2019 in respect of 913 securities pooled lending transactions entered into with these clients;
– record client order instructions received through 35 telephone lines between August 2017 and June 2019, involving over 2,000 transactions executed for more than 400 clients;
– follow applicable regulatory guidelines relating to the assessment of clients’ derivatives knowledge between January 2018 and June 2020 by failing to obtain trading evidence from clients who declared that they had conducted five or more derivative trades in the three years before declaration;
– disclose to 15 clients the “stop-loss event” feature of a structured note issued by an issuer, and assure itself that the clients understood the risks associated with that feature before selling them the note between October 2017 and February 2020.

For failing to act with due skill and care and put in place adequate systems and controls to ensure compliance, the agency has decided to sanction the bank despite UBS’s remedial actions and offer to compensate the clients affected by its failure to disclose the “stop-loss event” feature of the structured note.

UBS has agreed to engage an independent reviewer to review the effectiveness and adequacy of its remedial measures taken in relation to its telephone recording failures and fully cooperated with Hong Kong’s regulator in resolving the compliance concerns.

Nevertheless, UBS was unable to prevent the fine totaling $11.55 million, when taking into account both entities.

UBS AG is registered to carry on Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on corporate finance), Type 7 (providing automated trading services), and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance (SFO).

UBS Securities Asia is licensed to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts) and Type 4 (advising on securities) regulated activities under the SFO.

The Swiss bank has had troubles with financial watchdogs across the globe as of late. In July, UBS paid $8 million to settle an SEC complaint for compliance failures in a volatility-linked ETP.

In May, UBS was fined €172 million for participating in a cartel on government bonds between 2007 and 2011. The European Commission also fined Nomura nearly €130 million and UniCredit will have to pay €69 million.

Bank of America, Natixis, RBS (now NatWest), and WestLB (now Portigon) were also found guilty but escaped the fines.

Read this next


BlockDAG’s Impressive 30,000x ROI Potential and Moon-Based Keynote Captivate Solana And Bitcoin Cash Crypto Investors

Discover BlockDAG’s impressive moon keynote launch and its promise of a 30,000x ROI that is drawing investors from Solana and Bitcoin Cash.

Market News

This is it, the USD Strength has Come to an End

In the aftermath of Israel’s retaliatory strikes in Iran, the currency markets have entered a phase of heightened volatility, reflecting the intricate interplay between geopolitical tensions and economic fundamentals.


BlockDAG Leads DeFi Innovation with $19M Presale, Overshadowing Cardano and Binance Coin With 30,000x ROI and DAG Structure

Learn about BlockDAG’s growth in its presale, surpassing $19M, and its impact on the DeFi landscape, overshadowing movements in Cardano and Binance Coin (BNB).


BlockDAG Offering a Fresh Take on Meme Coin Development Amid Solana’s Challenges and Floki Inu’s Price Fluctuations With 30,000x ROI

Dive into how BlockDAG’s innovative presale, low-code platforms, and potential 30,000x ROI, outperform Solana’s technical hurdles and Floki Inu’s market predictions.


BlockDAG Excels With $2.2M In Miner Sales And Moonshot Teaser, Overshadowing Litecoin’s Rally And Dogwifhat’s Market Highs

Explore how BlockDAG’s $2 million Miner Sales & Moonshot Teaser eclipse the Litecoin price recovery and the Dogwifhat all-time high.


BlockDAG Leads Top 6 Cryptocurrencies to Buy in 2024 with a Potential Price Surge to $10 Leaving Cosmos, BNB, and Ethereum Behind

Discover the top six cryptocurrencies in 2024, including BDAG’s remarkable growth potential, BNB’s durability, Cosmos’ connectivity, and ETH’s eco-friendly advances.

Retail FX

Weekly Roundup: Prop firm arbitrarily accounts, Interactive Brokers’ CFDs in Japan

FX, Fintech and cryptocurrency markets have been bustling with activity over the past week, as is often the case. Keep yourself informed and ahead of the curve with a curated selection of crucial stories and developments that are most relevant to those engaged in the markets.


BlockDAG Redefines Crypto Mining as Presale Tops $18.5M, Outshining Ethereum ETF & Dogecoin Dynamics

The recent approval of the first Ethereum ETF in Hong Kong underscores a significant advancement in the cryptocurrency’s mainstream acceptance. While Ethereum continues to attract institutional attention, the Dogecoin price prediction suggests a possible resurgence, despite its current undervaluation from past highs.

Digital Assets

Bitcoin halving is done: ViaBTC mines historic block 840K

The Bitcoin network has confirmed its fourth-ever halving block, mined by the cryptocurrency pool ViaBTC, according to data from This significant event in the Bitcoin ecosystem reduced the mining reward by half, a deflationary measure occurring approximately every four years to control the issuance of new bitcoins and curb inflation.